Gold, XAU/USD, Silver, XAG/USD – Technical Outlook:
- Gold has risen above support-turned-resistance 1675-1685 mark.
- Silver has proven some upward momentum however remains to be inside its latest vary.
- What’s the outlook and what are the important thing ranges to observe?
GOLD SHORT-TERM TECHNICAL OUTLOOK – BEARISH
Gold has recovered fairly sharply after falling final month beneath robust horizontal trendline help at 1675-1685. Whereas this may occasionally have modified the very near-term outlook (a couple of days) to impartial, the general bias stays down for 2 causes.
Firstly, whereas the rebound has been pretty robust, gold hasn’t been in a position to decisively clear support-turned-resistance at 1675-1685. The preliminary spurt in value motion appears to have stalled across the resistance, which isn’t stunning given the importance of 1675-1685 (make or break scenario for gold over a multi-week / multi-month time interval), as this column highlighted a couple of weeks in the past.
XAU/USD Day by day Chart
Chart Created Utilizing TradingView
Furthermore, for the reason that decline began earlier this yr, the yellow metallic hasn’t been in a position to break above essential resistance on the 89-day transferring common (DMA; see chart). To be honest, the present rebound might be much like that of July-August – the rally ran out of steam across the common.
Therefore the bias for gold stays down for now until it is ready to clear resistance at 1735-1750 (together with the mid-September excessive and the 89-DMA). Any retreat might push gold in direction of 1660-1670 (together with the early-October low). A decisive break beneath the September low of 1614 might be a powerful signal that gold had resumed its medium-term downtrend.
SILVER SHORT-TERM TECHNICAL OUTLOOK – NEUTRAL
Silver’s positive factors have stalled after the rally within the earlier a part of the week because it checks a tricky hurdle on a horizontal trendline from Might at about 20.50. The 20.50-21.00 space is pretty robust resistance (together with the 200-week transferring common and 38.2% retracement of the autumn from March), so it could be powerful for silver to interrupt the barrier simply.
Therefore there’s a likelihood of a minor retreat in direction of 20.00, which ought to cushion the draw back. Moreover, given the Optimistic Directional Motion Index on the every day chart is above 25, the draw back might be contained (see chart). On this regard, the converged help space of 17.50-18.00 is sort of robust.
XAG/USDDaily Chart
Chart Created Utilizing TradingView
In sum, as this column famous in late September, the general bias for a couple of weeks is that of gentle restoration/broad vary. That’s as a result of constructive momentum divergence (lower cost related to rising momentum) on the every day and weekly charts level to at the least some consolidation following the slide from earlier this yr.
Nonetheless, past a couple of weeks, whereas the steadiness of dangers is tilted in direction of the draw back, it stays to be seen if Silver is ready to break above essential resistance at 22.00-22.50 (together with the 200-day transferring common and the June excessive). A decisive break above the resistance would meaningfully fade draw back dangers and lift the potential for an prolonged sideways value motion.
–— Written by Manish Jaradi, Strategist for DailyFX.com
DailyFX offers foreign exchange information and technical evaluation on the traits that affect the worldwide foreign money markets.
